Originally from Investment Treaty Arbitration and International Law – Preview Page

1. INTRODUCTION 

The threat posed by climate change cannot be overstated. On this, my eminent opponent and I emphatically agree. Successfully halting and reversing the disastrous impacts of human-caused climate change will require concerted action on a global scale. Where we disagree is on the capacity of investor-state dispute settlement (“ISDS”) to handle disputes arising in relation to this important global action. 

In considering the proposition—that international investment law and arbitration are ill-equipped to address climate change related disputes—it is important to differentiate between legitimate concerns about the speed or efficacy of that action and, at issue in this debate, the capability of the global ISDS framework to handle related disputes.  

The proposition has framed ISDS as an obstacle to climate action, but it is no more an obstacle than domestic courts. Like any competent court, ISDS is intended to fairly and impartially decide questions of law and fact. Its goal is not to reach a subjectively—even democratically—desirable result, but rather to protect legal rights and uphold legal obligations. Certainly, as in any court, there will be mistakes. Cases may be ineffectually argued or erroneously decided (and appealed or set aside). But ISDS is an adjudicative framework, not a political or democratic exercise—and the relevant metric for assessing its success is not comparison to a flawless (and fictitious) court. 

While the “threat of ISDS” is rhetorically compelling, this viewpoint overlooks the doctrinal elasticity, interpretive adaptability, and institutional evolution that continue to define the global arbitral order. It also places responsibility for creation of laws, and for (difficult) policy decisions about combating the threat of climate change, in the hands of those who are called upon only to interpret and enforce the existing law, and who uphold the stable, predictable international investment framework. 

Recall that the laws interpreted and applied by tribunals in ISDS disputes are typically negotiated and ratified by the respondent state.